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Dutch pension system tops worldwide ranking

For the third year in a row

Tags: Excerpts from the Windmill

LONDON - The Netherlands has taken the top spot in an annual survey of national pension schemes around the world. The Melbourne Mercer Global Pension Index ranked retirement income schemes of sixteen countries around the world on the basis of three key qualities: adequacy (appropriate provision of benefits), sustainability (the long-term durability of the system) and integrity (the regulation of private pension schemes, including the protection given to members).

Overall, the Netherlands' system - comprised chiefly of a flat-rate state pension and earnings-linked occupational schemes - came out on the top for the third year in a row, followed by Australia, Switzerland and Sweden. At the bottom of the survey were Japan, India and China respectively.

The report noted that due to a combination of ageing populations and growing levels of government debt all around the globe, providing adequate retirement schemes was becoming an increasingly difficult task.

According to report author David Knox, some governments have made important decisions which had a positive effect on the country's index value in this report, in other cases, it has been more difficult, often due to the expectations of those in the workforce.

The study listed a number of ways in which governments could improve pension systems, including raising the state pension age to reflect increasing life expectancy, encouraging more private savings, both in and outside pension schemes, and introducing obligatory contributions.

Reforms are being made to the Dutch pension system to deal with the country’s aging population, low interest rates and stock market conditions. The pension age is expected to rise to at least 66.